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FOUNDed.

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Preface to FOUNDed.

I first decided to write this book shortly after my fourth experience replacing a founder as CEO. I was fresh off a somewhat raw departure. Contemplating what was next for me, I began to write and blog. Perhaps this was to vent, perhaps this was to enable others to avoid the hazards I had experienced, or perhaps it was simply to figure out if writing would be my next adventure. I had many lessons that I wanted to describe at a time when I'd at least be able to pay my bills despite not having a current “real job” as my then 19-year-old daughter described it.

Shortly after beginning my writing, I was contacted by Noam Wasserman, a professor at Harvard Business School, who had adopted “Founder Frustrations” as a theme for much of his research. Noam was teaching a course entitled Founders’ Dilemmas at Harvard Business School, a graduate course aimed at helping his students understand the opportunities and obstacles of founding and working with company founders. Since I was writing, thinking and experiencing all of this, Noam suggested that the next time I was in the Boston area I might stop by for a cup of coffee and a discussion. Since I was less than gainfully employed, and residing only a few hours drive from Boston, I decided to take Noam up on his offer.

Noam and I hit it off. He had an abundant knowledge of founders and what drove them. He knew of their limitations as well as how difficult it was to succeed them. He knew why venture capitalists often expected to replace the founders they invested in, sometimes multiple times. And, at a time when it still hurt, he was sensitive to what I had just experienced. The meeting was fun as well as soothing to know that the experiences I had gone through were not unique. Leaving Noam’s office, I felt more than ever, that I too could contribute to this growing body of knowledge by continuing to develop the themes related to my very hands-on experiences working with and succeeding founders.

Shortly after my trip, Noam called to ask if I would be interested in documenting my then four founder’s transitions in a Harvard Business School Case Study. Cool, I thought. My life as part of a Harvard Business School Case would certainly be interesting and might just be the way I could best contribute to creating a discipline around transitioning founders. And since two and a half decades earlier I had unsuccessfully applied to this storied institution, it probably would be my last opportunity to attend The Business School in Cambridge.

Noam assigned a student assistant, Rosy Flynn, to interview me and begin to document and write the case. Most of it we did by telephone. I was surprised how many hours I actually had to spend with these interviews. I also was surprised at how much detail Rosy got into. Over the course of several weeks the case started to take shape. I was a bit sensitive to using actual company and individual’s names in the case. In the case she was writing, some names were to be changed to protect the guilty and some I felt comfortable to just use. Personally, I hoped no one I knew would read the case. Finally in late 2007 the case was completed.

Noam used the case in beta form with a small faculty audience to start with. Based upon that experience and the feedback he received, he decided it was good enough for prime time and in the Fall of 2008 used it in his class for the very first time. Noam asked me to attend the class so I could hear first-hand how the students would react to the various dumb and a few smart things I had done. I was honored to be there and readily agreed to attend.

Since then, Noam has used the case each year. And each year (except for the one when I screwed up my schedule and missed it) I have attended. Noam usually has his class end with one of the numerous brilliant future business leaders who attend The Business School playing my role and me playing one of my board members. As with many Harvard cases, the actual real-life result of the case is left open for the students to predict the result. Each of the years the case has been used, the vast majority of the students guess the ending incorrectly. It’s always rewarding and very humbling to hear smart students pick through my career and point out the now-obvious dumb choices I made along the way.

Despite having done this for several years, each class is a bit different. However, one class at Harvard during the 2012/2013 school year particularly stands out. That year, as usual, I arrived at Noam’s office about a half hour prior to the start of the class. Noam and I went over the somewhat ritualistic logistics and schedule for the day. During that conversation Noam casually noted that a guest was going to be attending the first class of the day. He mentioned that the guest was with a notable Boston-based Venture Capital firm – Northbridge Venture Partners. A receptive audience for Noam’s research are venture capital firms who often preside over founder transitions for the companies in which they invest. While this venture firm name stuck out poignantly in my mind, I don’t believe that Noam gave it much of a second thought. He likely forgot that in the very last section of my case Northbridge had been the lead investor. We had purposefully left the name of the venture firm out of the case, so I guess it never occurred to Noam. Now he had my attention. I quickly reminded Noam of Northbridge’s role in the case and inquired about which member of the firm would be attending. Looking over his notes, Noam noted it was Michael Skok.

What are the chances this was a coincidence? Michael Skok was the partner from Northbridge who sat on my board and who had delivered the final news to me about my tenure at Active Endpoints. Noam was visibly floored. He asked if I was ok with this or whether he needed to withdraw his invitation. After catching my breath, I agreed that Michael’s attendance might add some intrigue to the typical class and we proceeded.

I tried hard not to pull any punches throughout the class especially during the time where I had to play “Michael Skok” and the student played my role. It had been five years since the event and I felt that I had always been authentic in my portrayal of the episode. At the end of the class, Michael commented he believed the case was very “true to life” and I felt vindicated if not energized by our replaying the exercise together.

I continue to learn more about myself and even more about how to do this founder transition thing better each time I attend my Harvard case. Based upon Noam’s session rankings and his repeated invitation for the past six years, I can only assume that the students get something out of it as well. I heartily recommend that anyone that has the opportunity to have their professional life scrutinized by hundreds of really smart business students should take full advantage. Of course before you do be sure you have a really thick skin.

Several years into “performing” at Harvard, a professor at MIT, Matt Marx, decided to try out the case. I have had similar experiences at MIT the several years that I participated there. One class was particularly noteworthy. It was the last class of my day and I was tired. The day had already included three classes at Harvard as I hurriedly arrived for two more at MIT. Matt decided that he wanted to choreograph this last class a bit differently and rather than introduce me at the start, I sat innocuously in the back of the room. Despite my clear age advantage over those in the classroom, I was not discovered. Midway through the class, one outspoken student remarked candidly about one of the less-proud moments of my career. “Les needs to put his big boy pants on,” he declared. The class roared. Matt turned a bit white and the class continued. Near the second half of the class that Matt had allocated for my participation, Matt surprised the class by calling on me to respond to one of the issues raised. I couldn’t help but preface my response that “I currently WAS wearing my big boy pants.” Other than the now noticeably-sheepish outspoken student, it was a great learning experience for the class as well as one I won’t soon forget.

The Harvard case has since been adopted as part of the curriculum of some other colleges and universities as well. Often when they can track me down, I get an invite to participate in the class. I’ve had the privilege of joining the students at Union College (my alma matter) and the University of Maryland Smith School of Business, over the past several years, again learning from each of them. I am proud to have now impacted over a thousand future business leaders. My hope is that founders and their successors will each be a bit better off because of that.

Since the case was written, I’ve now completed my fifth founder transition. This one was at a company called Force 3, near Annapolis, MD. While none of my five transitions has been the same as any other, this fifth experience has confirmed that there are many similarities when a new CEO replaces the founder. I believe this tale is richer from the experience.

Whether you are a founder, a professional replacement CEO, a Venture Capitalist, Board member or a student, my hope is that you will learn from my experiences. You may or may not agree with my approach. If you were directly involved with any of these episodes, you may have a different recollection of the events I’ve portrayed during my journey. Running a company as a CEO is a difficult job. Despite how some view it, making hard decisions that affect peoples’ lives and livelihoods cannot be taken lightly. It certainly is a challenge to make and keep friends of your colleagues. As one of my more prophetic board members once said, “if you want a friend, get a dog”. I’ve had several great dogs over my career.

Les Trachtman, Annapolis, Maryland

Risks and challenges

I've already written and rewritten several chapters of this book. I expect that some of them will make it into the final product. But writing a book is a daunting task, especially as a part time venture. So it is possible that the publication date may be delayed by the demands of my "day job" as an entrepreneur. I also expect that once I have completed the writing that editing and production will take some time. So it is possible that this portion of the project may also be subject to delays. But the book inside me is burning to come out. So I am committed.

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